- The Washington Times - Friday, June 24, 2005

The Supreme Court yesterday said cities can seize people’s homes or businesses to make way for private commercial development such as shopping malls, a far-reaching ruling decried by property rights advocates.

By a 5-4 vote, the justices for the first time said governments can take private property and give it to developers citing eminent domain, a practice historically used for public highway projects.

D.C. Mayor Anthony A. Williams, who heads the National League of Cities, hailed the landmark decision as a “victory,” saying the tactic was used for successful redevelopment projects, including Baltimore’s Inner Harbor and Kansas City’s Kansas Speedway.

Justices John Paul Stevens, Anthony M. Kennedy, David H. Souter, Ruth Bader Ginsburg and Stephen G. Breyer formed a majority, which said New London, Conn., could force a group of homeowners to sell to the city so a riverfront hotel, private offices and a health club could be built.

“Promoting economic development is a traditional and long-accepted function of government,” wrote Justice Stevens for the majority.

Justices Sandra Day O’Connor, Antonin Scalia, Clarence Thomas and Chief Justice William H. Rehnquist dissented, slamming the majority for abandoning a “long-held, basic limitation on government power” to make such seizures ensured by the Bill of Rights.

Justice O’Connor said “under the banner of economic development, all private property is now vulnerable to being taken and transferred to another private owner, so long as it might be … given to an owner who will use it in a way that the legislature deems more beneficial to the public.”

Yesterday’s case, Kelo v. New London, centered on the question of whether, in forcing homeowners to sell, officials violated the “takings clause” of the Fifth Amendment, which says property can be taken “for public use” as long as “just compensation” is provided.

Controversy blossomed in New London during the late-1990s when the city-created a nonprofit development corporation and used eminent domain to clear residents from a 90-acre site. The corporation then leased the property for $1 per year to pharmaceutical giant Pfizer Inc., which in turn built a multimillion-dollar research center on it.

City officials argued that since the new commercial development provided growth — notably in the form of higher property-tax revenues — it was equivalent to “public use” and justified enforcing eminent domain.

Susette Kelo, a registered nurse who has lived her life of more than 70 years in one of the homes, and 14 other homeowners refused to sell, saying the sole purpose of using their land was for a new commercial project.

The group won a restraining order in lower courts. But the Connecticut Supreme Court sided with New London, giving the city ultimate authority to take the homes.

The U.S. Supreme Court backed the authority yesterday. However, the majority said the homeowners still deserved “just compensation” for their properties and left open the possibility individual states may restrict eminent domain in the future.

“We emphasize that nothing in our opinion precludes any state from placing further restrictions on its exercise of the takings power,” the majority opinion says.

According to the Associated Press, Connecticut is one of several states that either expressly allow a taking for private economic purposes or have not spoken clearly to the question.

Eight states — Arkansas, Florida, Illinois, Kentucky, Maine, Montana, South Carolina and Washington — forbid the use of eminent domain for economic development unless it is to eliminate blight.

Such “condemnation takings” have become common practice nationwide, where more than 10,000 properties were threatened or condemned in recent years, according to the Institute for Justice, a public-interest law firm that represented homeowners in the Kelo case.

The seizures may see city governments pay above market value to property owners in run-down areas so the areas can be bulldozed. But the practice has been known to create controversy, especially when the end result is not new public housing or a new city park.

It’s an “appalling decision,” said Dana Berliner, an attorney for the homeowners. “It’s one that one day the U.S. Supreme Court will look back on with shame.”

“The court has sanctioned the use of eminent domain to take the home of one person and give it to another person because that other person is going to pay more in taxes,” she said. “The battle is now going to move to the states, and we’re going to work to vigorously enforce state constitutional limits on the abuse of eminent domain.”

Robert Redding Jr. contributed to this report.

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